Fraser formally presented his 2010-11 budget recommendations to council members in detail for the first time. He said his numbers assume dipping $850,000 into reserves to get through the end of fiscal year 2009-10 and taking another $1.5 million in the fiscal year that starts July 1.

Ann Arbor City Administrator Roger Fraser

Ryan J. Stanton | AnnArbor.com

Contrary to budget impact sheets released in February that showed a $5.2 million deficit that remained to be addressed, Fraser's presentation Monday night showed his staff has worked to close what ended up being a $5.8 million budget gap for the coming year.

A public hearing on the budget is planned for 7 p.m. May 3. The council then meets one more time at 7 p.m. May 10 for a work session before the budget is adopted May 17.

"We will be making a decision on this budget — we'll certainly start making that decision at our second meeting in May, and we need to have made that decision by the end of May," Mayor John Hieftje said.

Fraser said at this time last year, city officials expected revenue of about $85 million for the 2009-10 budget, which they predicted would drop by about $2.5 million in 2010-11. It was expected a surplus from the first year would cover a slight deficit in the second year of the two-year plan, he said.

"In reality, what's happened is that our revenues this year have been short of expectations, resulting in an expenditure excess of about $2.8 million if we did not modify our spending," he said. "If we carried that forward into fiscal year '11, our revenue forecast is now at $77.5 million, and we've had a $5.8 million deficit that we needed to make up in order to balance this year's spending plan."

The budget Fraser released earlier this month showed $76.35 million in general fund revenue for 2010-11 and $77.88 million in spending, leaving a $1.53 million deficit in the next fiscal year.

Fraser said a drop in state-revenue sharing is the first and foremost problem the city has faced in the last two years.

"Last year when we put the budget together, we made the mistake of believing the state when they said that our state-shared revenue would be held harmless," he said. "In October, they announced that formal reductions were going to be implemented for this year. We forecast that by this time next year the state will have cut state-shared revenue — in the legislative portion of that state-shared revenue, the statutory portion — by half of what's left. So that would mean another $1.2 million reduction."

Fraser said investment income is down, and so is revenue from traffic citations. Development review fees — compared to previous years — are "virtually non-existent," he said. And the revenue the city forecast from parking meters hasn't been met because of actions by the council to hold off on installing new parking meters in near-downtown neighborhoods.

"The one bright spot in all of this was that our forecast in property taxes was actually a little bit pessimistic," Fraser noted. "We had about $300,000 this year in revenue that was better than we anticipated."

Fraser said the city continues to hold out hope it can find savings through negotiations with its labor unions. But so far only the firefighters union has accepted wage cuts. Other unions — including AFSCME, the city's largest union — haven't made any concessions.

"We have a contract that is existing with AFSCME that provides, in its terms, a 3 percent wage increase for AFSCME on July 1," Fraser said. "They're essentially the only group of employees who have an increase coming. It's fair to point out that this is the end of a five-year contract with them and, in the first three years of their contract, they had no wage increases at all. There were some lump sums, but they went for three years without a pay increase. Nonetheless, we have asked AFSCME to open the contract for July. That request is still pending."

"We're recommending the elimination of 15 FTEs in police — one of those is vacant," he said. "That's in addition to five vacancies that occurred in the early part of this last fiscal year that were not filled."

Those cuts will save $1.6 million. Another $2 million in cuts is being proposed by eliminating 20 positions in the fire department — that's six more than originally planned this time last year.

Fraser acknowledged his budget also includes reductions of $260,000 in funding for nonprofit human services agencies. He also proposes savings by eliminating maintenance to 17 city parks and another $120,000 by "de-energizing" some city streetlights.

Fraser also is making room in the general fund budget by shifting the costs of right-of-way tree planting to the stormwater fund.

"This is based on the premise that we have identified in research during the last couple years, which indicates that the most effective thing that we can do to reduce runoff is to plant trees," he said. "And so our stormwater activities, we believe, will be enhanced by the continuous efforts on tree planting and that the stormwater fund could justify paying for some of that planting outside of our parks in the coming year."

The city is raising stormwater rates by 2 percent in July, wastewater rates by 3 percent and water rates by 3.88 percent.

After Fraser's budget presentation, Ann Arbor resident Libby Hunter serenaded council members with an original song in which she criticized the city for the ongoing $47 million building addition to city hall. She questioned the project coming at a time when city services are being cut.

"Police-courts building, we adore thee," Hunter sang. "Grand McMansion of our eye. We lay off police to afford thee. You are our new blushing bride."

Hieftje responded to Hunter's song later in the meeting, maintaining the city has never laid off a police officer as long as he can remember. He also said he thought everyone had figured out by now the need for the police-courts building.

"Actually the conversation started a very long time ago," he said. "And, in fact, when I arrived on council ... back in 1999 there was a discussion of rebuilding this entire building and the drawings had been done and the city was ready to move forward. And that was back in the '90s when the money was flowing freely."

Hieftje said city officials chose not to go forward with a new building at that time, and it wasn't until recent years that the idea resurfaced.

"The police-courts building was, in large part, triggered by a letter from the county administrator a few years ago now ... informing us that the county had another use for the courtrooms where the city courts reside," he said. "And in my conversations over the weekend with a county commissioner, indeed the county is moving forward with their plans to move the juvenile courts from Platt Road over to take the space where the Ann Arbor courts had been. That will be coming to the county for a vote sometime relatively soon. One of the judges is drawing up that plan, and that is moving forward."

Hieftje said the city looked at about 10 different locations where it could put the courts but ran into challenges with the strict security requirements.

"And then if you really want to go back several years — decades perhaps — to when this building was constructed, you find that there was never a plan to keep the police in this building and the police have been looking for a station for all these years," Hieftje said of the police department's current occupancy of city hall. "It made really good sense a few years ago when these plans were put together to build the police station and to put the courts on the same foundation. And that's what City Council decided to do."

Comments

digger

Sun, Apr 25, 2010 : 1:32 p.m.

I read mr. Frasers report to council about the CUB agreement ordiance council enacted in Febuary. Seems he thinks the agreement would not be of any value to the city yet the city council enacted it. He even suggested it could posibly cost the city money. Gee somebody must be getting something out of this if not the city.

nxil2009

Wed, Apr 21, 2010 : 8:24 a.m.

Ann Arbor is facing the same economic problems that every element of governments all over the nation are facing; are they going to cut/gut non-essential services to make sure they provide a safe, secure, and clean environment for their hard working, tax paying citizens, or are they going to continue to take from their working, tax paying citizens and give to those who refuse to do anything for themselves. As long as government and citizens obstinately turn a blind eye to this, the whole system is on the fast track to collapse.

Awakened

Wed, Apr 21, 2010 : 8:14 a.m.

"How much more of this rambling incoherent non-sense must we endure from Roger Frasier?" The Amazing Awakened predicts: A new job offer to somewhere warmer with less hours so he can spend more time with his family before the end of the year. A2 is about milked dry.

Fred&amp;Barney

Tue, Apr 20, 2010 : 8:10 p.m.

How much more of this rambling incoherent non-sense must we endure from Roger Frasier?

prinzsbus

Tue, Apr 20, 2010 : 4:45 p.m.

To Lokalisierung: As far as living by my means I can live (but many cant) but when you are taking pay cuts to avoid lay offs to help people not lose jobs and Michigan is going under; Unemployment on the rise your whole life can be turned upside down.. I too took student loans to go to college ( still unemployeed in the wonderful state) but you must not listen to Obama too much as student loans are also on the decline meaning parents will now have to pay for the childerns education out of pocket.. My issue is that the city keeps wanting to cut firefigters/police postions/wages changing health coverge etc.. Council wants to up layoffs from 14 to 20 and If our family has to pay for health coverage or take another pay cut we could be in trouble, and yet you dont hear about any city officials pay cuts.. Only Union Public Safety

Lokalisierung

Tue, Apr 20, 2010 : 4:37 p.m.

"As far as living by my means I can live (but many cant)" I understand, and as I said if you lose a house because of a 3% pay reduction, it's pretty much your own fault. I can't have too much sympathy for that; I'm sorry. I of course do have sympathy overall and wish non of them had to take pay cuts or lose jobs. Can't kids get jobs to pay for college? I think people do it everyday, but I will concede to you my loans were more than a few years ago and I probably am not quite up to snuff on the present scenario with them. "and yet you dont hear about any city officials pay cuts.. Only Union Public Safety" Well I don't know what you mean buy "city officials." If you mean city council, elected officials, some of them gave some back but they don't make enough to put a dent in anything. If you mean administrators I agree with you and they need to take a snip too. Non union employees though have already lost more than 3%. Like I said though...adding more FF job layoffs after they said they weren't is low class for sure. It must be some kind of power move becasue obviously the other Unions are not going to be willing to open their contracts now.

David Cahill

Tue, Apr 20, 2010 : 4:32 p.m.

There are the stated reasons for the police-courts facility, and then there are the other reasons. For the past several years, there has been serious bad blood between the circuit court judges and the district court judges - so bad that it helped lead to the construction of the ill-starred police-courts facility. Circuit Judge Timothy Connors wanted the district judges to hire his wife, Margaret Connors, as a magistrate. They refused. Connors has pushed for removing the district court from the county courthouse ever since. Circuit Judge Archie Brown physically took overDistrict Judge Ann Mattson's courtroom while she was on vacation. Mattson had to bring in the Lansing big guns to get her courtroom back. Your tax dollars at work.

prinzsbus

Tue, Apr 20, 2010 : 4:25 p.m.

To Lokalisierung: As far as living by my means I can live (but many cant) but when you are taking pay cuts to avoid lay offs to help people not lose jobs and Michigan is going under; Unemployment on the rise your whole life can be turned upside down.. I too took student loans to go to college ( still unemployeed in the wonderful state) but you must not listen to Obama too much as student loans are also on the decline meaning parents will now have to pay for the childerns education out of pocket.. My issue is that the city keeps wanting to cut firefigters/police postions/wages changing health coverge etc.. Council wants to up layoffs from 14 to 20 and If our family has to pay for health coverage or take another pay cut we could be in trouble, and yet you dont hear about any city officials pay cuts.. Only Union Public Safety

prinzsbus

Tue, Apr 20, 2010 : 4:08 p.m.

Also AFSCME is getting a 3% pay raise July 1 2010.. HMMM Must be nice to be sitting pretty.. While Firefighters struggle to stay afloat keep homes cars health plans and send their Kids to college.. better yet allow their kids to be kids and pay for them..

Lokalisierung

Tue, Apr 20, 2010 : 3:56 p.m.

"Also AFSCME is getting a 3% pay raise July 1 2010.. HMMM Must be nice to be sitting pretty.. While Firefighters struggle to stay afloat keep homes cars health plans and send their Kids to college.. better yet allow their kids to be kids and pay for them." No offense but if you can't pay for your house car and chidren's college becasue of 3%, you need to learn how to live within your means. You should take a money managemnt class like I did in high school. AS for your kids, they can get loans to goto college, just like I did, and my parents did. (The FD got the shaft in those sneaky extra lay-offs I'm not disputing that at all.)

Ryan J. Stanton

Tue, Apr 20, 2010 : 2:12 p.m.

Note that a video of Libby Hunter's song from last night is now embedded in the story.

bunnyabbot

Tue, Apr 20, 2010 : 1:45 p.m.

yeah no one is interested in public safety, polls are unscientific, meanwhile Rome burns

BornNRaised

Tue, Apr 20, 2010 : 1:33 p.m.

The funny thing here is that when Fraser came to the down town fire station to talk with everyone, his statement was that none of the residents have shown him any interest to keep public safety a priority in this city. I reminded him of all the polls that have already been taken that put public safety as #1. His response... "those aren't scientific." The only way he and council will listen is either a mallet upside the head, or actually going to a council meeting and speaking your mind.

a2doc

Tue, Apr 20, 2010 : 1:04 p.m.

$300,000 for an environmental assessment and preliminary works for an unenvironmental airport expansion is a waste of money. A "safety" expansion (the only way to secure federal money) in an airport that is perfectly safe is ludicrous. Oh, the other way to get the money was to claim the expansion was to reduce noise, but even the City Council would see through that lie. Stop the proposed Ann Arbor Airport Expansion.

bunnyabbot

Tue, Apr 20, 2010 : 1 p.m.

the mayor says that they haven't laid off any police, politician speak. just offered buy outs to avoid layoffs, what the people know

Awakened

Tue, Apr 20, 2010 : 12:57 p.m.

Thank you for the link, Ryan. @BenWoodruff. Hang tough. Fraser may have purposely made it unlikely to get any concessions past their membership so he can push them into an income tax or headlee increase while taking none of the blame himself.

DagnyJ

Tue, Apr 20, 2010 : 12:53 p.m.

So, can someone explain to me why the city needs to raise water and stormwater rates when we have surplus funds in that part of the budget?

prinzsbus

Tue, Apr 20, 2010 : 12:13 p.m.

Also AFSCME is getting a 3% pay raise July 1 2010.. HMMM Must be nice to be sitting pretty.. While Firefighters struggle to stay afloat keep homes cars health plans and send their Kids to college.. better yet allow their kids to be kids and pay for them..

prinzsbus

Tue, Apr 20, 2010 : 11:29 a.m.

To Ben... ben I totally agree The firefighters where the ones who went to the council to help they took the pay cut with a promise of no lay offs yet Fraser comes back and has UPed the lay offs from 14 to 20... Why in the Heck would any other Union or non union employee of this city agree to a pay cut after what he did to the firefighters. Also food for thought the firefighters also had a plan to save more money yet Fraser has not listened.. Yet Fraser is the first to put FireFighters on the cut first; when they where the first to step up.. Guess it doesnt pay to be the "Good Guy" as they saying goes Good Guys always finish Last.

Ryan J. Stanton

Tue, Apr 20, 2010 : 10:50 a.m.

I added a link to Fraser's budget presentation at the beginning of the story. Take a gander. It's a 1.1 MB 17-page document.

BenWoodruff

Tue, Apr 20, 2010 : 10:47 a.m.

"Fraser said the city continues to hold out hope it can find savings through negotiations with its labor unions. But so far only the firefighters union has accepted wage cuts. Other unions including AFSCME, the city's largest union haven't made any concessions." You must be kidding...Why would I make any concessions when I know, based on the Firefighters, that you will not only lay off, but lay off more than you told me? Why would I ever agree to concessions with an untrustworthy group of administrators?

Karen Sidney

Tue, Apr 20, 2010 : 9:44 a.m.

Mayor Hieftje says that "back in 1999 there was a discussion of rebuilding this entire building and the drawings had been done and the city was ready to move forward." When I looked through the several notebooks of materials I have on city hall expansion plans I was unable to locate anything that documented the city was ready to move forward on a plan to rebuild Larcom. What I did find were space needs studies done in 2000 with several options. One of the options was knocking down and replacing Larcom. The option selected by council in an August 21, 2000 resolution was to build an annex on the west side of Larcom because it was lower cost. The annex did not include the courts because Council was advised that there would be cost savings if court space was built on the county courthouse site. On June 24, 2002, a couple of months after he was hired by the city, Roger Fraser sent a memo to the mayor and council that said "It appears that the Council's request for an action plan to be submitted by December 2000 was not fulfilled, I will be seeking direction from Council on this matter." When the architect's contract for the police/courts building was presented to council for approval, Mayor Hieftje threatened a veto because the cost burden of the new building would tie the city's hands for years to come. It's unfortunate Mayor Hieftje let some of his colleagues bully him out of doing the right thing.

prinzsbus

Tue, Apr 20, 2010 : 9:16 a.m.

The biggest problem here is that residents of Ann Arbor dont always read our comments online to know the truth of how money is spent they dont all attend the meetings as I belived they would all be sickend and move.. I know I would and I know of a few people who placed homes up for sale because of the way the city spends money..

prinzsbus

Tue, Apr 20, 2010 : 9:08 a.m.

There are many things this city does NOT need right now, one is the rail system that is only in the planning phase yet they want to start building for it, the city does not need any more trees art work bick pavers buildings etc.. What this city needs is Fire and Police personnel.. and its council not to lie to them... Laying off Firefighters and Police only puts their lives in danger as well as the people of Ann Arbor.. Mr Fraser think about the men and women who serve this city and your people, think about how they already sacrifice their lives for those, think about the Family they would leave behind and stop thinking about making your city more beautiful...Your layoffs will jeopordize the City of Ann Arbor and the Safty of all who live and visit it.

Awakened

Tue, Apr 20, 2010 : 8:59 a.m.

So the budget is $1.53 million short. Council is spending almost a million on a sculpture for the new court building, paying $300,000 to study a new train center for a train that won't happen, and building a parking structure at $100,000 per spot. (Amongst other boondoggles and studies) But the problem is the Unions. Priceless!

xmo

Tue, Apr 20, 2010 : 7:53 a.m.

Like its residents, the city is going to have to reduce its budget. It needs to provide Fire Police and some city admin but the rest should be on the chopping block.

a2grateful

Tue, Apr 20, 2010 : 6:44 a.m.

The former police facility was a pit worthy of no person. Those that think otherwise never had a chance to see it, or understand its problems. The courts used to be at City Hall until they moved to the County Building. I believe the City did everything it could to work out continued tenancy at the County Building. The County has its own plans for its own space. For these reasons, I fully support the new Police and Courts Building. Users of the Courts deserve safe, effective, and functional building improvements. Same goes for police personnel. These services are essential services that require infrastructure that is above and beyond normal office space improvements.

AAresident

Tue, Apr 20, 2010 : 6:20 a.m.

If the city had not used its reserves for construction of the police-courts building, our city would be able to get through this tough time more easily. Add that to the unnecessary construction of the $50 million underground parking at the library lot and the millions going to the U of M to construct the Fuller parking garage and it's not difficult to see where a lot of the city's money problems come from. It's down right embarrassing that the city is promoting the U of M parking garage as a "Transportation Center" that will include commuter rail service. That's just a fantasy which is being used to justify the project. Our town doesn't need career politicians with grand plans for spending our money. Let's get some new faces on the city council this year!